Correlation Between Solowin Holdings and RENN Fund

Can any of the company-specific risk be diversified away by investing in both Solowin Holdings and RENN Fund at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Solowin Holdings and RENN Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Solowin Holdings Ordinary and RENN Fund, you can compare the effects of market volatilities on Solowin Holdings and RENN Fund and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Solowin Holdings with a short position of RENN Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solowin Holdings and RENN Fund.

Diversification Opportunities for Solowin Holdings and RENN Fund

-0.14

Correlation Coefficient

Solowin Holdings  RENN Fund

Good diversification

The 3 months correlation between Solowin and RENN is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Solowin Holdings Ordinary and RENN Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENN Fund and Solowin Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Solowin Holdings Ordinary are associated (or correlated) with RENN Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENN Fund has no effect on the direction of Solowin Holdings i.e., Solowin Holdings and RENN Fund go up and down completely randomly.

Pair Corralation between Solowin Holdings and RENN Fund

Given the investment horizon of 90 days Solowin Holdings Ordinary is expected to generate 5.39 times more return on investment than RENN Fund. However, Solowin Holdings is 5.39 times more volatile than RENN Fund. It trades about 0.04 of its potential returns per unit of risk. RENN Fund is currently generating about 0.05 per unit of risk. If you would invest  608.00  in Solowin Holdings Ordinary on December 2, 2024 and sell it today you would lose (485.00) from holding Solowin Holdings Ordinary or give up 79.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.76%
Values	Daily Returns

Solowin Holdings Ordinary  vs.  RENN Fund

Solowin Holdings Ordinary

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solowin Holdings Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

RENN Fund

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RENN Fund are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, RENN Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Solowin Holdings and RENN Fund

The main advantage of trading using opposite Solowin Holdings and RENN Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solowin Holdings position performs unexpectedly, RENN Fund can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in RENN Fund will offset losses from the drop in RENN Fund's long position.

The idea behind Solowin Holdings Ordinary and RENN Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.